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A Reply To The Retired IFS Officers Supporting India’s New Farm Laws

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Twenty retired Indian Foreign Service (IFS) officers have written a joint letter to the World Trade Organization (WTO) supporting the three farm laws made by the Indian Parliament, and criticising people and organisations in the USA, UK, European Union and elsewhere who supported the ongoing Indian farmers agitation.

With respect to these officers, it has to be said that they have not understood the real reason why our farmers are agitating and opposing the laws. The Indian farmers are agitating because they are not getting adequate remuneration for their produce, and the laws made recently will make the situation worse.

There is no doubt that agriculture in India is in a state of crisis. The 300,000 to 400,000 farmers suicides in India (averaging 10,000-12,000 per year) over the last 25 years or so is adequate proof of this. Even in Punjab, the most developed state in India in agriculture, whose villages I personally visited a couple of years back, I met widows of farmers who had committed suicide.

In almost every country in the world, agriculture is subsidised by the state. This is so even in the USA, the most developed country in the world. And this is because modern farming is very different from the old type of farming which was done by bullocks, horses and buffaloes for tilling the land and other primitive methods. Modern farming is done with tractors and requires several inputs e.g. fertilisers, pesticides, new varieties of seeds, irrigation by tube wells, etc. For getting these inputs, farmers have to take loans from moneylenders, who charge heavy interest. Since farmers do not get adequate remuneration for their produce, they fall into debt, which keeps mounting, and the time comes when they may even have to sell their land. This is why they commit suicide.

Agriculture is different from other kinds of industries, because it produces food, which is essential for our sheer survival. One can survive without a car, a TV set, an air conditioner, etc (though one may be inconvenienced without them). But food is as essential for bare survival as air or water, and hence agriculture must be maintained even if it has to be subsidised by the state.

The demand of farmers for a Minimum Support Price (MSP) for their produce is therefore absolutely justified, for farmers cannot be expected to do farming at a loss. Indeed, the Swaminathan Committee, which had been set up by the Government, recommended MSP at 50% above the cost of production. Today MSP is given to barely 6% of the total farm produce in India. The three farm-related laws made recently do not provide for a statutory MSP, and this is the main objection of the agitating farmers.

It is said that one of these laws gives freedom to farmers to sell anywhere, not just to the government run market places (APMC). But firstly, this freedom was already there, and secondly, it does not guarantee MSP to farmers selling to businessmen. The farmer is in a weaker bargaining position as compared to the corporate forces who intend to enter the agricultural sector in a big way. These big enterprises will naturally have the upper hand.

As regards contract farming, this too will be detrimental to the farmers. Suppose the farmer contracts with the businessman before beginning his operations to sell his produce for, say, Rs 100. Then, even if the market price later rises to Rs 150, he will still only get Rs 100. But if the market price falls below Rs 100, the businessman can wriggle out of the agreement and can refuse to pay Rs 100 by having some loophole in the contract, or by saying that the product was of inferior quality, etc and so he will not accept it.

“Freedom of trade” is a very rosy expression, but it overlooks the fact that the parties may be in an unequal bargaining position.

The ex-IFS officers in their letter have written “The balance between market forces and food security/farmers welfare is a delicate one, and it it is the sovereign prerogative of government to strike the balance.”

This sounds a very fine statement, but what if the government has surrendered its sovereignty to the corporates?

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